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Sources said that Motional laid off about 550 employees, or about 40%, in the latest restructuring.

About 550 employees at self-driving car company Motional have been laid off, according to WARN notification documents and information obtained by company sources.

Earlier this week, TechCrunch reported that Motional is suspending commercial operations and delaying plans to launch a robotaxi service with its next-generation Hyundai Ioniq 5 robotaxi until 2026 as the company undergoes a restructuring. Now we have a clearer idea of ​​the magnitude of the cuts.

An unnamed Motional employee told TechCrunch that every team has been affected, with high-level departures including the company’s COO Abe Ghabra.

Sources said the technical project management team responsible for autonomy and cloud operations has been cut from 44 to 19 people. The Silicon Valley-based Milpitas office — home to a division of Motional’s computational design team — is also closing, two sources confirmed. Sources also confirmed that the high-performance computing team has been eliminated, including its director David Fermor. Sources said the Venice office in Los Angeles – a small operations and commercial center that provides delivery services for Uber Eats – is also closing.

TechCrunch has also learned that the team behind Motional’s remote vehicle assistance platform has been significantly laid off. Employees in testing, product, security, cybersecurity and legal teams are also affected.

About 145 of the laid-off employees are from Pittsburgh, according to WARN notices filed this week with the Pennsylvania Department of Labor and Industries. Most employees in Pittsburgh work in software, according to people familiar with the matter. Motional has also conducted testing in California, Nevada and Massachusetts but has not yet filed warning notices in those states.

One source said there was little impact on the autonomy and infrastructure software teams. That appears to leave Motional with a ragtag team to help improve its core technology and business model while preserving its remaining limited capital.

A source at Motional told TechCrunch that the company’s technology still has a lot to improve. Until this week, Motional had been operating a robo-taxi service in Las Vegas through the Uber and Lyft networks and providing delivery services to Uber Eats customers in Santa Monica. At all times, there is a human safety operator behind the wheel, in addition to another expert in the passenger seat who manually logs any issues. Meanwhile, Motional’s main rival Waymo is offering fully self-driving services in Phoenix, San Francisco and Los Angeles.

Motional did not initially respond to TechCrunch’s request for comment.

Survival requires drastic cuts

Motional was originally the product of a $4 billion joint venture between Hyundai and automotive supplier Aptiv. Earlier this year, Aptiv’s future was thrown into doubt when it announced plans to reduce its ownership interest and stop allocating funds to the venture due to the high cost of commercializing its self-driving taxi business and its long road to profitability. Aptiv expects to reduce its stake in Motion to about 15% from 50% as of March 31, giving Hyundai the remaining control.

A week ago, Hyundai raised $475 million from Motional and spent another $448 million to purchase 11% of Aptiv’s common equity. Before that, Motional took out a bridge loan in March as a replacement for another investment to buy some time after laying off 5% of its workforce a few weeks ago.

A source at Motional told TechCrunch that the company is already spending 7% above its approved budget through August 2023, so Hyundai’s savings may not be enough to keep the startup going without significant spending cuts Survive.

An employee also said that Motional would only pay a portion of bonuses for 2023 performance – one slide showed the figure was as high as 28.5%.

Motional’s layoffs are indicative of a larger problem in the self-driving car industry, as fewer companies can continue to invest billions of dollars in a technology that is far from ready for prime time, even It’s still far from breaking even.

More details about severance packages

A fired employee told TechCrunch that affected employees will continue to receive pay for 10 weeks, with the last day scheduled for July 6. Furloughed employees will receive a benefit called “garden leave” rather than a lump sum payment. According to the separation slides reviewed by TechCrunch, wages will be paid every two weeks like regular wages.

That might give Motional a chance to save a little on severance. Motional asked employees to notify the company if they find new jobs before July 6 to “avoid employment overlap.”

Under the agreement, equity employees who vest in March 2024 will not be paid immediately as Motional is still waiting for its valuation to determine a new stock price.

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